Have you ever thought about what would happen to your business if you lost the data on your computer system? What would be the results to you if someone hacked into your system and obtained confidential information about your customers and employees? These are some of the security risks related to computer use. Small businesses need to recognize the cost of not properly addressing web security as well as the price tag for basic actions to prevent problems.

Cost of Computer Breaches and Failures

Your business life is on your computer — your customers, banking information, accounting and tax information, and more. If you experience a failure of your hard drive, you may be able to recover the data, but it will cost you. Most small businesses don’t have IT departments on hand to address computer issues; they have to use outside experts for computer problems. Depending on your location and the extent of your problem, expect to pay an outside expert a few hundred or a few thousand dollars for data recovery. And don’t ignore the cost of lost productivity; this could be thousands of dollars in down time. In extreme cases (your computer is destroyed by fire or your laptop is stolen), lost data can force you out of business. One source says 93% of companies that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster.

If your computer has been hacked and confidential information compromised, you’ll want to notify people in your database. About 45 states have data breach notification laws requiring companies to notify affected individuals that their “personal identifiable information” (PPI) has been obtained by outside hackers. According to a recent survey, the average cost of a data breach in 2009 was $204 per customer.

What does this mean for your business? The costs of failures and breaches can be high, so it’s better business practice to invest money preventing problems.

Backup Data

Technology developments have made it inexpensive and easy for any size business to protect data. For example, companies can use offsite backup services to automatic this daily chore. Set your system to backup nightly when it’s not in use and you’ll always have your data protected. Some companies charge a flat price (such as about $55 per year). Others use a sliding scale that depends on the amount of data you need to back up. Some leading companies for small-business backup include Mozy and Carbonite.

Use Cloud Computing

Instead of storing data on your computer, use online solutions that eliminate the need for you to keep software and data on your system. “Cloud computing” is a term usually used to mean what you do outside your computer’s firewall. Cloud computing eliminates the need for backing up data. Yours is stored on servers elsewhere, depending on the vendor you use for a particular application.

Take, for example, a simple business application like keeping your books. QuickBooks lets you buy software for your system and store your own data or you can use its online version. With the online version, you enter data through the Internet; your data is stored and protected by QuickBooks. The cost of the basic online version is $9.95 a month, compared with a one-time cost for software of $159.95.

Adopt Wise Computer Practices

While there is nothing you can do to be hacker-proof (Google was hacked in 2009 by some people in China), you can keep things safe to some extent.

Limit access to your business computer so only authorized employees can view confidential information on your system.

Encrypt data on laptops so if they are lost or stolen, your data isn’t exposed.

Use anti-virus software.

Work with IT People

If you depend heavily on your computer, any glitch can temporarily put you out of business and cost you money. You can, of course, call upon IT help, such as Geek Squad, when you run into a problem.

It may be a better strategy to engage an IT company to monitor your system and provide immediate help when you experience a problem. The monthly cost for regular monitoring and on-call help may be modest, especially compared with the cost you could experience for lengthy down time while searching and waiting for someone to make repairs.